Freud begins by reviewing all existing scientific literature on dreams, showing that previous accounts treat the dream as a somatic event devoid of meaning, a position he immediately contradicts. He insists the dream is capable of interpretation, and that popular belief in the dream's hidden significance, though unscientific, is closer to the truth than academic dismissal.
The method is demonstrated on a specimen: the dream of Irma's injection, which Freud dreamed on the night of July 23 to 24, 1895. He had received an unflattering report from a colleague about a patient whose treatment he considered unfinished. The dream stages an elaborate scenario in which other doctors are found responsible for her continued illness. Extended analysis of each element (the hall, Irma's throat, the formula for trimethylamine) shows that the dream's motive is Freud's wish to be cleared of blame. Its content is the fulfilment of that wish.
From this specimen Freud draws the general thesis: the dream is the fulfilment of a wish. He immediately confronts the obvious objection, that many dreams are distressing, not pleasant. His answer is that the objection is aimed at the manifest content, not the latent thoughts. When unpleasant or frightening dreams are analysed, they too prove to satisfy a wish, albeit one that waking consciousness would prefer not to acknowledge. The distortion of the wish is the work of a psychic censor, a force that polices the passage from the unconscious to consciousness, compelling the dream to speak in disguise.
The centrepiece of the book is the account of the dream-work. Condensation accounts for the brevity of the manifest dream relative to the richness of the dream thoughts: multiple people, events, and ideas are merged into a single composite image. Displacement transfers psychic intensity from the central wish onto peripheral or indifferent material, so that what seems most vivid in the dream is often the least emotionally significant element, while the true subject has been pushed to the margin or omitted altogether. Secondary elaboration, a further process, imposes a surface coherence on the dream, making it read more like a story than the fragmentary assemblage it actually is.
In the final psychological chapter Freud extends these findings into a general model of the mind. The unconscious operates according to a primary process governed by wish-fulfilment, free displacement of energy, and the absence of contradiction. The preconscious and conscious systems impose a secondary process of logical organization and inhibition. The dream is produced when, during sleep, the censor relaxes slightly and repressed wishes from the unconscious make their way toward consciousness, but only in disguised form. This structural account made dream interpretation, in Freud's formulation, the via regia, the royal road to knowledge of the unconscious in mental life.